ECB Raises Key Interest Rate Amid Middle East Conflict

The European Central Bank (ECB) has raised its key interest rate to 2.5 percent, up from 2.25 percent.

The decision was made in response to inflationary pressure caused by the conflict in the Middle East, particularly the oil price shock resulting from the war in Iran.

Economists warn that this measure may not be enough to bring down prices, with some predicting a 'new normal' of higher oil and gas prices.

Fund manager Simeon Mavroudis notes that the ECB must balance two opposing forces: the need for a more restrictive monetary policy due to rising energy prices, versus the risk of further weakening the already slow-growing Eurozone economy.